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Sri Lankan rupee steady; importer dollar demand continues to weigh
December 14, 2016 / 7:03 AM / a year ago

Sri Lankan rupee steady; importer dollar demand continues to weigh

COLOMBO, Dec 14 (Reuters) - The Sri Lankan rupee traded steady on Wednesday as exporter dollar sales and inflows from remittances were offset by demand for the greenback from importers after a long weekend, dealers said.

The rupee usually appreciates in December ahead of Christmas and the new year due to remittances from Sri Lankan expatriates abroad. However, dealers said they see downward pressure due to higher dollar demand from importers.

Rupee forwards were active, with spot-next forwards trading at 148.85/149.00 per dollar at 0633 GMT, compared with Friday’s close of 148.85/95. The markets were closed for public holidays on Monday and Tuesday.

“Today’s (dollar) demand may be due to the long weekend, but the pressure (on rupee) persists,” said a currency dealer, requesting anonymity.

The central bank on Wednesday raised the spot reference rate by 10 cents to 148.80 rupee per dollar, dealers added. The spot rupee was hardly traded, but was quoted at 148.70/95.

Pressure on the rupee was expected to ease when seasonal inward remittances begin and importer dollar demand weakens ahead of the year-end festival season, dealers said, adding that demand from state banks is holding the rupee steady.

A few dealers expect the rupee to be under pressure on fears that U.S. President-elect Donald Trump’s economic policies will lead to a stronger greenback and trigger foreign fund outflows.

Foreign investors have net sold 45.4 billion rupees ($305.6 million) worth of government securities in the seven weeks ended Dec. 7.

The Federal Reserve will conclude its two-day policy meeting on Wednesday and is widely expected to raise the interest rate.

Sri Lankan shares were down 0.16 percent at 6,314.13 as of 0626 GMT. Turnover stood at 106.1 million rupees ($714,237.6).

$1 = 148.5500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri

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